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And Scene: CME Hikes Silver Margin For Third Time In 7 Days, Raises Initial, Maintenance Margins By 12%
Last week two silver margin hikes of 9% and 10% did nothing, which is why this week's first hike (of many more) by 12% to the maintenance and initial margins was to be completely expected. We believe that nothing short of 100% margin (coupled with not one single ES margin hike by the Globex) will eventually placate the ardent Comex risk managers who are terrified their models may end up being wrong about "stuff." One thing is certain: the panic is palpable and the administration will stop at nothing to prevent the $50 limit order from triggering silver's surge to triple digits. We wish them all the best in this endeavor and are grateful for any and all BTFD opportunity.
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Yeah, shorting at $34 and covering at $44 is great for making profits.
Are you referring to me? I did not know MM bought any SLV puts.....
I've been buying puts since the beginning of the year. I bled away some premium in the first quarter and it dragged down my returns by about 2%, but the last round of puts (July strikes - 40s, 35s, 32s, 26s and 20s) is working out nicely.
What is more interesting right now is that out of the money July puts at low strikes are in the high 70s implied vol...
Nice play!
I wasn't confident enough to buy the July's. You're a braver man than I am.
So the OOM's are cheap eh, I'll have to take a look. Six weeks to the bottom.
I wouldn't say they are cheap in the traditional sense (like gold vol in the 20s), but when implied vol moves up that high on the out of the money strikes - it generally implies there is a high probability of a big move to the downside. I know a guy who says you should ALWAYS buy an option when the implied vol moves above 80, as a rule of thumb -- that the option is really trading on the outcome of a binary event at that point.
80 implied vol means that daily vol needs to exceed 5% for the option to be profitable - or that a really big move is coming.
Excuse me --- I seem to have made a wrong turn.
Can either one of you direct me from underneath this bridge?
MM won't make any money 'til he sells hit puts and considering he is still bearish on silver he won't do that and he is out of the money still so we'll just have to see if there are more margin hikes to save his play or if they are done jerking around for now.
The CME is hitting the silver bee hive with a stike. Soon people will stop investing with them and demand physical.
Come on decent, hard working people of the Far East, take these corrupt to the core U.S. tyrants to the cleaners, take all the physical off the markets. Bring down the blight that is the U.S., the whole world is absolutely sick of it.
+1
I will personally applaud the disparition of this sick, retarded, hypocritical country.
They are panicking.
..and I grabbed another piece of physical.
Firefighter302
If it's going to triple digits why would you have a limit order at 50, seems to me you would just buy it now before it reaches 50. Buying it now would help the price rise to 50 and trigger the limit orders. So buy now to crash the banks keep buying looks like their are quite a few willing sellers.
Double top in gold today and double top in silver last week.
Medium term tops in both Ag and Au in place.
Sell in May and go away.
Merely a slowdown whilest the rubes contemplate their choices. $60 spot by Memorial Day bitchez?
Great. The sooner we get to a 100% physical only market -- particularly in gold -- the better.
Freegold. Bring it, bitches.
I love it when last month's tops become this month's dips...
I'll take 500 maple leafs with a side of fries, please.
Well said :)
Ozzie Scott
Well said :)
Ozzie Scott
Picked up a little more of the shiny stuff today.
http://online-gold-trading.com/the-gold-dinar-and-silver-dirham-in-indonesia
My issue is that I do not know if I will ever be able to sell - It is so shiny.
MMMMMMMMMMMMMMMMMM metal
Oh baby baby baby...thank you thank you thank you...I love everything about you, especially your predictablity...always there for me.
XOXOXOXOX's ;-)
The CME did the right thing by raising margin requirements.
I just don’t like that they did it on a big down day. That is suspect. There is no need to do this big margin change on a down day, except to squeeze out underwater longs.
But the CME should have indeed raised margin requirements.
Back on 11/9/10, the CME raised margin requirements from $5000 to $6500 to control one 5000oz silver contract.
http://jsmineset.com/2010/11/09/cme-group-announces-money-and-margin-req...
on 11/9/10, the price of silver was $28.55 on the London fix, and so 28.55 * 5000oz = $143K. So it cost $6500 to control a $143K contract, or 4.6% maintenance requirement.
Today, on 5/2/11, the price of silver was probably $45 on the London fix, so 45 * 5000oz = $225K. So it costs now $12,000 to control a $225K contract, or a 5.3% maintenance requirement.
Why all the weeping and wailing? Everyone should shuttup until the margin requirement is 10% or 20%, but not now at 5.3%. That’s a lot of leverage.
I'd like to see someone show a comparison of margin requirements across all commodities.
Today, on 5/2/11, the price of silver was probably $45 on the London fix, so 45 * 5000oz = $225K. So it costs now $12,000 to control a $225K contract, or a 5.3% maintenance requirement.
You don't "control" anything if the physical ain't there. This is a directed, desperate assault, unrelated to any parity of margin-utopia. The shorts are deeply panicked and hoping there are enough weak hands to douse the run of silver to its value level, which is well, well above their squeeze point.
So wipe that stupid look off your face and buy, buy, buy.
Here we go again. Silver is crashing to 30, during May: (the chart is so old (March 13th) and bit off in timing, its already boring, but its still valid):
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...
Hey all, I just got onto this comments board today after a long time of reading and learning about silver from the posts and comments here. I started buying SLV and PSLV about two weeks ago so you can imagine it's been a bit exciting!!
I was asking on the other thread earlier about how much of this move is because of all the TROLLS that are here (and I assume on the other smart sites too - seekingalpha, thestreet, etc)?? Since we all KNOW that the dollar is garbage and that the USA is BANKRUPT already (unless those brilliant DC pols decide to actually DO SOMETHING for a change and don't raise the debt limit - how dumb do they think we are?!?!?) isn't it obvious that silver is going a LOT higher? There are probably 100 technical reasons to own silver (more like 150 I bet) but isn't this just obvious? It's a SURE THING.
The trolls are small fry I should suspect, and are just jealous. Watch what happens when silver goes back up which imho it will.
And watch the trolls vanish when it does.
Remember, metals are subject to very violent swings. We saw the same shit last week.
Today, the $ caught a bid right under 72.75, and that was your late day selloff.
Worry not, the $ is about to swan dive with no parachute.
See this site if you haven't already:
http://tfmetalsreport.blogspot.com
Panic at the LME:
http://www.youtube.com/watch?v=9AlH2oYedfk
Panic Room = Blythe's Office
It is hard to believe anyone is actually on margin in silver or that margined knowing this has been going on for months. I am thinking these margin raises are just making people short.
Yawn.......wake me when under $40 so I can reload
Good I need it to come down in price if ya catch my drift...
Support in and Base building at $43.50-60, buy now. buy, BUY, BUY
Just ordered 20 ASEs from Gainesville.
Beat you into submission if you don't play their game. Screw them!
They know they're is no supply to cover even a couple ounce order.
It's over a month delivery for anything.
Let the paper game implode then get some true price discovery!
Exactly !
Well said.
Firefighter302
You guys still made more money than me.
I sold the bulk of my silver in the mid twenties. Dont begrudge me a little scratch.
Those of you who just hung from the mid twenties are still way ahead.
My complements for your big balls.
top, I have not sold any of my silver and do not plan to. Will be adding on one more dump. Not too late to get back in. We all have been there to some degree. But good job.
We've got the biggest balls of them all !
http://www.youtube.com/watch?v=VjkJfMrQ4bc
I won't begrudge you, but you could learn a lesson. The same one that RobotTrader needs to learn. Just buy physical and hold.
I used to daytrade, but I don't any more, and I have never made as much money as I am making now. Just buy and hold. KISS principle, for an overly complex world.
I started buying in the $12's and the $700's. I've never stopped. As the FRN's roll in I roll them right back out and into Silver and Gold. If I've had a very good week I buy Gold. If I've had a "normal" week I buy Silver. When Silver/Gold ratio hits 18-1 I'll convert all Silver to Gold.
By August, margin hikes will be hourly!
Gotta love it, BTFD!
www.silverdoctors.com
I still got my order in at 40+ for another 100 ounces. Let the good times roll.
If you want to see what J6P thinks go look at eBay - Eagles are going for over $50 + shipping expenses.
Nobody is selling hard cold metal for anywhere near spot.
More Joe and Mary Sixpacks are losing faith in U.S. Clownbux every single day, and at rate that should scare the ever living shit out of Central Banksters & their con artist kleptocratic friends.
This is a true wake up call. This time is different. It's not a cornering of the market or 'play' by a BSD; it's the sound of trumpets and drums, beating out warning sign that the end of faith in all things fiat is near.
I've never seen more average people get angry with paper fiat and kick it in the balls like I am now.
Fuck you, Bernanke. Go fuck your criminal selves, Goldman Sachs & JP Morgan. Your demise is near at hand.
"Eagles are going for over $50 + shipping expenses." = flash crash didn't happen. Comex is just one market for valuing AG. The time will come soon where COMEX price will be irrelevant.
"Margin hikes hourly." Perfect, just perfect..... lol
Wonder what the price will be at 16:00 on Friday?
Lobotomy-faker will tell you on Saturday. He'll also tell you that he's up on the trade, regardless of which direction the price moved.
So what is the total margin now, I dont know how to read the CME stuff.
In a sense their cannibalizing their own.
They don't want the paper pawns wiping
them out either.
Got Euros, just wait'n.
Anybody who buys assets on margin these days is an idiot. So I welcome them hiking the margins. It will flush out the idiots and leave the strong hands.
I can't be bothered by speed bumps from the pits of the paper traders. Their recent price discovery battles may have been welcome in the short term...but they are not key or required ingredients in my long term wealth building strategy
http://www.globaltvbc.com/Bizarre+coincidence+Laden+Hitler+same/4710105/...
Hitler died on April 30th too.
if tptb don't want me to own something it must be for a reason. for that reason alone i'll be a buyer of more physical silver and gold.
Hey Lt., that was one of the most concise bits of truth I have seen here in a while...
Bravo; coupons for metal (that they DO NOT have enough of).
my thoughts, too. coupons for a beautiful silver or gold coin. what more could you ask for?
God I'm bored. Might as well be listening to Genesis.
If your life bores you ....risk it.
Here's a little allegory of futre physical silver prices courtesy of Dan Osman ... and something you might consider taking up to relieve your boredom :). A feat of courage and skill as remarkable as any I can recall....less than two minutes:
http://www.youtube.com/watch?v=4-pNFapUkus&feature=related
...inconceivable!
Check out the volume today:
Bored, bored, bored.
http://youtu.be/hfjGRBFd7mQ
Yes, and still down 40% for the year.
So what? Take a position, asshole. Otherwise STFU.
This could very well be just a minor blip. The trend in silver is of course still intact. We havent even had a test of the 50 dma.
Check out the volume last week.
"Last week’s total trading volume in Silver was at least 7, 915 million ounces, counting the Comex plus SLV and other Silver ETFs. In other words, 7.5 years worth of Silver supply changed hands last week."
http://peterlbrandt.com/8-years-of-global-silver-supply-changed-hands-last-week/
Holding out for triple digits.
FLASH CRASH big phama......MRK GILD ABT LLY all sold up 50+ points
Comex should just go to all cash . . . then kill themselves.
after the first margin raise I commented there would be more within a week, the front running sell off was different, much more intense. You can see it still taking place, last night was just a way to get out of a lot of short positions.
Hopefully everyone read Ed Steer's commentary showing the big drop in short interest by the vultures. http://www.caseyresearch.com/gsd/home
You can see a panic move to clear out of the silver short position ASAP, of course the CME is taking it's orders from the Morgue as usual.
This desperation appears that JPM wants out of the shorts and into longs ASAP. I do expect the Sunday night raids (triggering stops) to continue until they are net long, then watch the sky.
Beeeeeeeeeeeeeeeep! Beeeeeeeeeeeeeeeeeeeeeeep! Beeeeeeeeeeeeeeeeeeeeeeeep!
Sorry guys thats my moving truck backing up! carry on!
Lmao!
Is there a way to bet on the next margine hike? Hopefully something that allows 99.9% leverage?
JIM ROGERS was hoping for this to happen, I hope he is right by saying that silver has to correct.......The problem is to determine where lies its strong support??Will it stay above 35$ for few weeks before it resumes its uptrend?
PTB desperation now totaly obvious, ham fisted lame attempts to mash silver like the Incredible Hulk dont phase me a bit, nothings changed at all.
Trend still in your favor.
Where is Math Man?
Back in his moms basement playing with his training account. Still afraid to trade his allowance.
You have been officially dissed math man. Come out of hiding.
Who knows, I've asked him openly to share his put's. He never has that I've seen, just say's he is up and then disappear's till there is a dip in price.
I don't know if he buys physical with his paper profits or not, or if he is just bs.
Well if he aint coming out then i am going back to work. Somebody has to pay the taxes so you scrotes can have your bread and circuses.
I'm here - and I've told you guys several times what I own.
My Aprils expired and I bought July's: 40s, 35s, 32s, 26s and 20s
(on SLV)
Quit your bitchin' bitchez!
BTFD
This smacks of desperation to me. I should probably get rid of more paper and place another apmex order now.
HAAAAA!
Finally an administration that grow'd weary of the big hat no cattle blokes in the market of the precious. After all be said and done the common, middling and gentry will again hold the precious and it's cousin gold as a proper trade unit.
all of you are wrong, CNBC alone knows the truth: its the "speculators" driving the price down.
http://www.cnbc.com/id/42865108
I about fell off my chair laughing after reading this "article."
I admit it.
It was me. I did it.
well keep going dammit i've got a buy order at 33.50
I hope collectively, contiunued physical accumulation can break these guys. For once it would be nice to see the average guys win one. I buy a little every month. Something about stacking feels so right in light of what we know will continue in some form or fasion - money printing, debt issuance.
We got the scum bags on the ropes boys. We have to keeo the pressure on.
China seems to be collecting.
Thats a monster never taken into account before.
I wouldnt be surprised if this action were coordinated.
No accumulators want to see high silver right now.
Still not a great price with the markup, but getting better... I'm hoping for a $40 buy,... waiting and hoping.
I bought PSLV at the IPO and sold for 20. I agree with Mish, nothing goes up in a straight line and ends well. I will re-enter silver trade in the mid 30's. If I miss, well still got the gold.
It's becoming to much to handle for the Cartel now. Expecting a major False Flag event on a wide scale shortly. That's all they have left in the bag now.
How many times is this now, 3 or 4, in as many days?
I'd be willing to bet this margin hike was pre-planned at their April "soiree" gold and silver dinner...most likely discussed following organized trips to el bano where lines of "blow" were provided to counter the effects of the copious amounts of booze thrown at the guests prior to the keynote (read: comedy) speaker addressing the attendees with more wisdom concerning precious metals from the sesspool of experience gained from years working as a "Top Shill" on CNBC's Fast Money. We is gonna make you feel good....even if things look really bad.
They don't like the game, so they change the rules...marvellous!
Friggin' in the riggin'.
micro cap silver stocks should be excellent buys as soon as silver hits bottom, they havent been able to catch up with silver for the last 6 months or so, ..
I bet they will outperform silver by manyfolds
negatory. in fact theyve been revealed to be suckers bets as they become worthless when their assets rise. too many 3rd worlders ready to communize them
Meh, late to the thread ... but wanted to ask this ... genuine question ...
Regards,
Cooter
Requiring 100% margin would likely destroy the exchange. It would simply be rendered impotent as everyone moved to exchanges without such requirements, or, if all exchanges adopted such a policy, to retail outlets.
Dunno about the second one. I can think of no logical reason why the margins weren't just raised to an acceptable level ONCE rather than THREE TIMES. It's like they are trying to remind market participants that they can change the rules at any time, which is again, bad for the exchange in the long run.
The margin requirement should be set to a percentage, and they can modify the percentage when volatility gets uncomfortably high. Maintaining a nominal requirement seems ripe for abuse (CONSPIRACY THEORIST! OFF WITH MY HEAD!)
Cooter,
I think the CME Group has an endless supply of "suppression dry powder"
All you can do at this stage of the game is have some oz's of physical...when the puppet masters usher in the new "medium" that will be used by their serfs. Just ask Nelson and Bunker.
http://themonetaryfuture.blogspot.com/2009/01/hunt-brothers-demanded-physical.html
Play their casino games at your leisure....but hedge your bets with a bit of physical.
IIRC, the exchange has hiked margins for palladium above 100% on at least one occasion. See http://www.thegoldeconomy.com/2011/03/trading-the-big-dips-in-silver/ (search for "palladium") for a mention of this, although I haven't been able to find confirmation on the web.
1. No. Most exchanges have rules about the maximum price movement in a given period (usually a trading day), before they suspend trading. The maximum margin would be whatever that maximum price movement is.
It should be noted that margins are set (usually), based on the implied volatility of the shortest contract, at the request of the clearing house (sometimes the exchange and the clearing house are the same entity).
Personally I don't track Silver derivatives, but I assume that there are 1M forwards/options. The current margin of 12% implies (to me) that the 1M implied vol is 12%!! This makes sense if large players (**cough** JPM HSBC **cough**), are trying to move the market by shorting it, and counter players (?) are taking deep in-the-money long positions in the opposite direction.
2. Despite the apparent conspiratorial nature of these margin hikes, the simpler explanation is that as silver continues it's tear upwards (and those short try desperately to move the market back down), the implied vol increases, and with it the incident of margin calls. Hence the margin requirements are lifted as insurance against default.
As to the effect this had. Well, it was $49, then the little crash to 42 and a mere 3 HOURS LATER (HA HA HA), it is back up to $45 and heading north as I type. I would guess that the longs will stump up some cash for the new margins and jump back in 4 hours when NY opens.
BUT!!!! HERE IS THE IMPORTANT POINT ABOUT THE SILVER MARKET!!!
THEY JUST CAPTURED OSAMA BIN LADEN SO NOW EVERYTHING IS OK.
edit:
THEY JUST KILLED OSAMA BIN LADEN SO NOW EVERYTHING IS OK.
(
A:I will see your birth certificate, Mr President, and raise you an Adobe Illustrator.
B:You leave me no choice, I raise you the death of Osama Bin Laden!
A:It is a bold move. Call.
)
The Question: Is silver really in a bubble or was it just undervalued for so long?
[IMG]http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/2_Ben...$%21%40%21__driver.gif[/IMG]
Good question and one that I always consider when people are talking about the unsustainability of these moves.
I think the short answer is that it was undervalued. If you look at silvers price action over multiple decades it doesn't look so astounding.
In the long timeframe we will see the period of gold:silver-ratios of over 1:20 as a blip unique to the 20th century.
GOLD FLASH CRASH
$1545 to $1515 and back in seconds
WTF was that?
Stop run. No rules no limits on these guys. spot low on that was about 1530.
Every pullback we have this inane discussion.
Has the US Treasury become solvent?
Silver Technical Analysts: War's over, man. Dimon dropped the big one.
MaxKeiser: Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!
Fencesitter 1: Germans?
Fencesitter 2: Forget it, he's rolling.
MaxKeiser: And it ain't over now. 'Cause when the goin' gets tough... the tough get goin'! Who's with me? Let's go!
[runs out, alone; then returns] What the hell happened to the Silver.Liberation.Army. I used to know? Where's the spirit? Where's the guts, huh? "Ooh, we're afraid to go with you MaxKieser, we might go broke." Well just kiss my ass from now on! Not me! I'm not gonna take this. Dimon, he's a dead man! BlytheMasters, dead! CFTC Commisioners...
Fencesitter1 : Dead! MaxKeiser's right. Psychotic, but absolutely right. We gotta take these bastards. Now we could do it with conventional weapons that could take years and cost millions of lives. No, I think we have to go all out. I think that this situation absolutely requires taking physical delivery, or what John Nadler would call a really futile and stupid gesture be done on somebody's part.
MaxKeiser: We're just the guys to do it.
Fencesitter 1: Let's do it.
Fencesitter 2: LET'S DO IT!
Annimal House; loved that movie.
Short the Yen, Short the Euro Folks. The Almighty Dollar will reign for a few months more for now.
At what rate is the purchasing power of fiat depreciating and will depreciate?
China raising wages and rates, USD falling, PIIGS starting to stink, oil MENA still messy, Japans interupted capacity probably much more of a problem than reported.... cant help but think that things in fiat are going to cost a whole lot more in the future.
The whole global economic edifice is creaking and groaing and some toads are bound to go feet to the sky sending a variety of tsunami hither and tither.
I have no idea of the future but know their are a great number of unusual and unprecedented risks out there - don't think I'm gonna be departing with my silver gold anytime soon.
traders may trade here. many already have. plenty of stories of people going to the dealer and selling their silver.
i watched it for a while, today, in a store; guy just stepping over bags of silver on the floor behind the counter. a woman had about $5 worth of junk silver and left with abt $140+. people were waiting to cash out and get this stuff off to the smelter. rivers of silver.
blythe is out: DJ Comex Gold And Silver Warehouse Stocks-May 2
the banksters will buy, right now, ya know? Hahaha!
Can the Comex deliver? That's the big question. If they somehow manage to dodge the delivery bullet in May, how many more times can they do it?
This is ridiculous
If the comex want the buyers to put up additional margin- fine. But it should ask the sellers to deposit the same percentage in physical silver. Only then can one have a real price discovery mechanism , protect their establishment and protect the buyers.
SLV etf will likely fall into the 38-40 range and then bounce.
this guy nailed this trade and was not too early
http://shortetflist.com/
Dollar setting up to bounce with 88% of commodity opinion poll a bear according to sentimentrader
you can read all the facts here
http://etfusdollar.com/
It all depends on the end of QE(?)..the only scenario I see that could make your bets correct, is if the Bernak removes liquidity from the market (which I actually think he will do). However, I believe it will only be for a short while as this will send the markets down. Then after some well manipulated shorting by the TBTF, the politicians will beg for another round of QE(?) BIGEER BETTER FASTER AND STRONGER...then we are "TOO THE MOON AND BEYOND!". I am a hold right now, but enjoying the small correction/battle from $45 to $50 and back again. If your puts are right for July (if above scenario plays out)..You are a Rock Star! See ya in August!
Great. Let them hike margins to 100% and go cash only.
Unable to use leverage to play the futures market (except for RegT shares and 2X ETF's), most players who previously did not own any physical will get some and more big players will take delivery.
After all if you are investing at 100% cash, you might as well get the physical instead of holding a 100% cash unleveraged futures contract. further boosting demand for physical.
The margin hikes will achieve exactly the opposite, namely an explosion in price. This is a classic example of short-term thinking without regard for long-term consequences.
Use these supressed prices as an buying opportunity to load up on physical or mining shares.
The predators-that-be will do anything and everything they can to stop silver from setting an all time high. Of course they will fail, and probably within a month or so as purchases of physical overrun the fiat club.
Time to sell a 10 bagger miner and buy a 1000 oz bar or some 90%. I have enough "pretty" silver.
and once 100% margin comes and goes we know what comes next ... SEAL teams raiding your house for silver
Hopefully they will be baby seals --- I'll have my club ready and waiting.
IMPORTANT SILVER CHART:
http://stockmarket618.wordpress.com/2011/04/27/thurs-april-28
"The big driver at the moment is investor demand, as coin shops and bullion dealers are hard pressed to keep up with demand and the price for physical silver carries a sizeable premium over the ‘paper-digital’ silver price that is reported by the COMEX.
The bullion banks that stupidly shorted millions of ounces of silver are facing margin calls that collectively total billions of dollars. We are seeing signs that these banks are trying their utmost to cover these short positions without causing price to run too far ahead of them. (For evidence of the most recent attempt by the bullion banks to suppress the silver price visit today’s silver chart at www.kitco.com).
This chart courtesy Cotpricecharts.com shows a drop in the ‘net short’ position of commercial silver traders (purple bar). This drop is the largest drop in years, from 53,000 to 43,000! This is very bullish as it shows us that the commercial traders do not believe silver is topping out, or they would be selling into it. The next largest drop (from 57,000 to 48,000), occurred in February 2010 and silver then rose from $15.51 in February to $19.34 in the next three months – an increase of 25%! The next COT report is due out on Friday May 6th and is expected to be even more bullish, due to the raid on silver taking place May 2nd."
http://news.goldseek.com/GoldSeek/1304432068.php
Question to be asked, as Turd Ferguson noted, "Why don't they do this for oil, and other food commodities? Why just silver?"
The criminal banksters are running scared. It is the time for us to get right in their face.